One Couple’s Story
Birdie and Bob Feldman were looking to simplify their lives, spend more time on their favorite pastime — boating — and have a charitable impact. They came upon the perfect solution. To demonstrate their support for City of Hope, they made a gift of real estate: an apartment building they bought as an investment years ago.
With the support of City of Hope’s expert Planned Giving team, the Feldmans created a charitable trust, which enabled them to sell the property and avoid incurring capital gains tax on the transfer. The proceeds from the sale were invested, and the Feldmans receive an annual income that will continue for both their lifetimes, after which the remainder will be used to support lifesaving research and patient care.
“Forty years of being a landlord is enough. Even though we have a management company, being a landlord is very demanding. We want to be able to go on vacation without having to worry about the property … and spend more time on our boat than we are able to now. And we found a way to help people at the same time!” says Bob.
Example: Income and Tax Deduction From Donated Real Estate*Estimated blended Federal/CA Long-Term Capital Gains Tax Rate of 33.93% with an estimated cost basis of $982,000. The estimated capital gains tax liability is $478,500.
**The charitable deduction is based on the appraised value at the time of the transfer into a charitable trust as well as the ages of the donors, which are 83 and 70. The $1,221,875 charitable deduction can be used in the year of the gift and any unused portion can be carried forward for up to five years.
***The net annual income represents a 3.8% return based on the property value of $2,500,000. For this comparison, the estimated net income from the outright sale is based on a 5% investment return. The 5% rate of investment return for the Charitable Trust is based on its annual value.